This is your SolarWakeup for May 10th, 2021
Role Of DG And NEM 3.0. We haven’t talked about it in some time but California is coming up to a legislative crossroads and grid operators may have one less tool to use in their grid planning. There is a bill working through the assembly that could possibly end net metering as we know it and change the rules for existing solar that has been installed. In solar we’ve become normalized by the process of being attacked and hearing the worst-case scenarios only to see the end result work for us. The problem with being numb to the process is that you never know when you may just take it for granted and lose. While it cost jobs in Nevada and Arizona when we lost those net metering battles, imagine the future of NEM 3.0 in California is lost to the incumbents. Not only does it destroy 40% of the market, but it also crushes the foundation of the entire solar market, investor confidence, and the opportunity to continue the energy transition.
Pipeline Cyberattack. A fuels pipeline company was attached by ransomware hackers and had to shut down their pipeline as a precaution. While the infrastructure itself was not impacted by the hack, it clearly identifies the risk of large concentration into that system. It also should create the question internally at your companies how your systems are maintained from a compliance and cybersecurity perspective.
What’s The Plan? The IEA is about to publish the report that outlines its view on how to get to 100% by 2050. Interestingly, the road will likely not only include generation but also the ability to expand and integrate more variable generation using more dynamic infrastructure on the grid-like smart transformers, storage, and HVDC. From an engineering perspective, you have to be excited about what a dynamic grid can do, with more elasticity than ever and generation on both ends of it. The entire planning exercise is made more complicated with the electrification of transportation, just think of the single variable of a school bus fleet needing to be charged at the same location at the same time, a couple of thousand times per day across the Country.
The Infra Bill. Congress is back in session this week. Don’t get distracted by some of the crazy sideshows that are happening or any of the commentary from individuals on either extreme side. This week, Biden is looking to play Let’s Make A Deal!
News
Opinions:
Have a great day!
Yann
This is your SolarWakeup for May 7th, 2021
The Jobs Census. While the pandemic took some air out of the jobs market in the solar industry, our productivity increased a great deal. We’re now seeing the lack of workers in solar once again while seeing backlogs and pipelines expand across the market ecosystem. Without a doubt, pipeline of trained workers is a crucial piece of the pie.
Busy Week. Sorry for the lack of content this week, it’s been a busy week at FlexGen and I will be getting back to your regularly scheduled programming next week. Have a great weekend!
News
Opinions:
Have a great day!
Yann
This is your SolarWakeup for May 6th, 2021
Opinion
News
Opinions:
Have a great day!
Yann
This is your SolarWakeup for May 5th, 2021
24 By 7 Procurement. Corporate renewable energy purchasing is headed to the next phase and it is going to impact ecosystems across the market. Corporates have reached their 100% renewable energy goal and now going to the time matching of procurement and usage. Google Cloud is announcing that they are partnering with AES to buy renewable energy matched to their usage. This is a little fish in a big ocean way to do it but here are two things that will happen next. Data centers will go first, not only those that are exclusive to big corporates, but data centers that are providing services to companies will have to match renewable energy to their consumption in order to retain their customer base. Second, renewable energy generators will have to learn to shape their curve. Imagine having to reengineer the 8760 forecast based on the consumption curve of the off taker. Careful though, missing your production could mean having to go to the market to make up the energy and leave you naked on the hedge.
News
Opinions:
Have a great day!
Yann
This is your SolarWakeup for May 4th, 2021
May The 4th. May the force of all the regulatory, policy and market tailwinds be with you. EPA is back to protecting the environment from greenhouse gases.
News
Opinions:
Have a great day!
Yann
This is your SolarWakeup for May 3rd, 2021
Capital Deep Dive. There are some important things to note in this deep dive by BNEF about the global capital to project pipeline. The energy transition, centered around the goals pledged to by economies around the world, is going to take north of $50 trillion (with a t) and even then will allow for the allocation of $2-3trillion per year. Their estimates have it at $2.1trillion this year alone. There are three items that I want to highlight and get you to think about. A few years ago, the CEO of an oil major said even if he wanted to invest $10billion into renewables, he wouldn’t find that scale in the market. That has changed and create the inverse problem. Large investors like majors and pension funds are going direct to the pipelines and not looking to trade those assets once they’re in the portfolio. The lack of trading is noted by BNEF and makes the value of platforms higher than ever before (and I note that the value of the platforms used to be less than zero just 5 years ago). Lastly, let’s realize the scale of the capital appetite and what it will take to credibly deploy it for long life assets. That means that not only do the investment platforms need to do the work well, the companies that are hired to build, procure, integrate and maintain those projects are vital to the ecosystem.
And Now You Know. The entire previous paragraph is why companies like FTC Solar are going public, Enphase, Shoals and Array are valued at 100x earnings with Nextracker and Loanpal filing their IPO docs.
ICYMI. I spoke about our role in helping develop the energy storage pipelines across the energy sector in this coverage.
News
Opinions:
Have a great day!
Yann
This is your SolarWakeup for April 30th, 2021
Does Storage Work? For your project. I had the pleasure of talking to Andy Colthorpe of Energy-Storage.news about the most common question I’ve been getting since joining FlexGen. Asset owners and developers alike are looking for answers on how storage creates revenue upside and capital deployment opportunities on their existing assets, pipeline and future developments. Regardless of the interconnect, storage has a role and a timeframe for the right return on investment. By doing a project feasibility assessment, you identify the target revenue situation and the corresponding capex maximum based on your return requirement with the ability to actually get the project done if the project gets the green light. Thank you to Andy for the article and Solar Builder and Solar Power World for their coverage as well.
The Congressional Address. Good coverage in a variety of publications about climate and how it made the primetime in Biden’s address to Congress. Politico’s Greenwald takes a contrarian view to the climate policy is jobs policy in today’s rundown.
Permits Cost Time Cost Money. It’s been 3 years since I first mentioned the idea of instant permits on this newsletter. While the concept has not changed much, permits take too long and cost too much for the service they provide to homeowners, the reality of instant permits has reached much higher probability and in some jurisdictions, reality. There are a few people, one in particular, that have been relentless advocates for SolarAPP. In due time they will get recognized in a major way on this platform, but everyone involved in residential solar should be paying close attention to how they can help this effort.
Power Up, EPCs. And come ready to learn! The Business PowerSeries from EagleView - moderated by yours truly - has an upcoming webinar on scalability. Remember what happened when Icarus flew too close to the sun? This session will show you how to avoid any sinking missteps and instead scale your business using sustainable strategies. I’ll be joined by JP Gerken, CEO of Zenernet and solar selling extraordinaire. He’ll talk about what it takes to turn a business into one of the largest residential solar companies in the country. Sign up now to save your spot for May 12th!
News
Opinions:
Have a great day!
Yann
This is your SolarWakeup for April 29th, 2021
It’s Tracker Day. FTC Solar has successfully gone public, joining the public markets and trading under the ticker FTCI. The original price target was $19 per share but the sale actually happened at $13 per share. The company raised a little over $130mm for the company balance sheet and some more shares were sold as a synthetic secondary. The stock did trade up to almost $15 by the end of the trading day, still representing a 7x revenue market cap.
What’s Next? You’ve been reading about it here for months and it finally happened, Nextracker, the global leader in single axis trackers, has filed for their IPO. The S-1 is still confidential but expect to see revenues well north of $1bb and margins comparable to Array Technologies. This would be the fourth tracker IPO in less than 12 months and bring the largest to the market. Nextracker is led by solar industry vets Dan Sugar and Bruce Ledesma which makes me want to be a bystander on the road show. Currently the company is wholly owned by Flex. As a side note, it is entirely possible that Nextracker valuation exceeds today’s market cap of Flex which was ~$9bb.
Clean Supply Chains. SEIA is stepping up to help the market ensure clean supply chains as it pertains to the Xinjiang forced labor reports. The Solar Supply Chain Traceability Protocol is a set of guidelines designed to help solar companies meet compliance obligations and, importantly, provide customers with assurances that their solar products are free of unethical labor practices. On April 30 at 1:00PM ET, SEIA will host a webinar to discuss the new resources and explain how solar companies can put them into practice.
Power Up, EPCs. And come ready to learn! The Business PowerSeries from EagleView - moderated by yours truly - has an upcoming webinar on scalability. Remember what happened when Icarus flew too close to the sun? This session will show you how to avoid any sinking missteps and instead scale your business using sustainable strategies. I’ll be joined by JP Gerken, CEO of Zenernet and solar selling extraordinaire. He’ll talk about what it takes to turn a business into one of the largest residential solar companies in the country. Sign up now to save your spot for May 12th!
News
Opinions:
Have a great day!
Yann
This is your SolarWakeup for April 28th, 2021
More Tomorrow. I don’t know about you but I’m busier than ever. You all should feel free to pitch in by sending me a paragraph to be included in the newsletter. Don’t pitch your book, if you’re going to get onto the newsletter, make the content valuable, have an opinion and make a point.
Power Up, EPCs. And come ready to learn! The Business PowerSeries from EagleView - moderated by yours truly - has an upcoming webinar on scalability. Remember what happened when Icarus flew too close to the sun? This session will show you how to avoid any sinking missteps and instead scale your business using sustainable strategies. I’ll be joined by JP Gerken, CEO of Zenernet and solar selling extraordinaire. He’ll talk about what it takes to turn a business into one of the largest residential solar companies in the country. Sign up now to save your spot for May 12th!
News
Opinions:
Have a great day!
Yann
This is your SolarWakeup for April 27th, 2021
Bipartisan Energy Policy? I had missed this message from Kevin McCarthy, the GOP leader in the House and host to the most solar by district. Is this politics or a real change in policy?
Going Full Stack. BP is registering to become an energy retailer. The oil major has long been in the energy wholesale markets, often working behind the scenes for dozens of energy retailers across the country. In deregulated markets retailers are the customer facing sales and marketing companies while the trading desks, which need massive balance sheets, often look more like BP. Part of this could be the upcoming shift in transportation from fuel to electricity. The electrification of fleets and consumer cars means that BP can’t give up their revenue to other retailers or utilities. By being a retailer, you could see BP offering fleet financing, onsite charging infrastructure and the energy package to go with it. If you think this is too far into the future? Oil traders are already financing fleet electrification across the globe.
Clean Goals, Clean Peaks. The RPS policy has gained steam across the Country and Biden is talking about it as well. With all this talk about 24/7 renewable energy, look for another headline to take over, the clean peak standard. This is an RPS that matches renewables with the highest peak of energy consumption so as efficiency and distributed energy lowers demand, the clean energy production needs to match the new peaks. Get your energizer bunnies ready!
Power Up, EPCs. And come ready to learn! The Business PowerSeries from EagleView - moderated by yours truly - has an upcoming webinar on scalability. Remember what happened when Icarus flew too close to the sun? This session will show you how to avoid any sinking missteps and instead scale your business using sustainable strategies. I’ll be joined by JP Gerken, CEO of Zenernet and solar selling extraordinaire. He’ll talk about what it takes to turn a business into one of the largest residential solar companies in the country. Sign up now to save your spot for May 12th!
News
Opinions:
Have a great day!
Yann